U.S. Housing May Be Turning Around, Shiller Says (Update1)

An improvement in home prices suggests the U.S. property market may be recovering, said Robert Shiller, a professor of economics at Yale University in New Haven, Connecticut.
By: Vincent Del Giudice: Bloomberg.com
“We might be seeing a turnaround,” Shiller said today in an interview on Bloomberg Radio and Bloomberg Television. “I say ‘might’ because there’s still a pretty weak economy out there.”

Shiller is co-creator of the S&P/Case-Shiller home-price index, which fell 15.4 percent in June from a year earlier, the smallest decline since April 2008. On a month-over-month basis, the index rose by the most in four years. The report was issued yesterday.

The month-over-month increase in home prices is “quite striking,” Shiller said. “The sense that something is changing is definitely in the air.”

Speaking about the broader economy, “recessions are generally ‘V’ shaped,” Shiller said. “Probably something like that will happen again,” even though a “disappointing recovery” is possible, he said.

The longest economic contraction since the end of World War II has claimed 6.7 million jobs since December 2007. Stocks are “a tad overpriced by historical standards,” Shiller said. The Standard & Poor’s 500 Index has surged about 51 percent from a 12-year low on March 9.